The SEC should perform annual audits on all exchange listed companies and bill them for the time the same way the FDIC audits banks. If you are allowed to shop your audit around to the accounting firm most willing to bend the rules than you are always going to have Enron style blow-ups.

Even if a govemental agency did the auditing you would still have some problems… but I’d bet they would be more infrequent than under the current system where companies essentially pay a firm to swear to shareholders their annual reports aren’t works of fiction.

]]>By: leona123http://blogs.reuters.com/felix-salmon/2010/12/21/cuomo-lashes-out-at-ernst-young/comment-page-1/#comment-22170
Wed, 22 Dec 2010 17:02:08 +0000http://blogs.reuters.com/felix-salmon/?p=6677#comment-22170You do know that there isn’t going to be “criminal prosecution” and that it is a civil suit? Very likely to settle out of court too.

As an auditor, E&Y has to follow the auditing standards set by US GAAS and it seemed like they did follow the standards that were set at the time. Post-financial crisis; there were some major changes to these standards.

]]>By: Danny_Blackhttp://blogs.reuters.com/felix-salmon/2010/12/21/cuomo-lashes-out-at-ernst-young/comment-page-1/#comment-22144
Wed, 22 Dec 2010 03:47:37 +0000http://blogs.reuters.com/felix-salmon/?p=6677#comment-22144Mr Cuomo presumably knows the difference between liquidity and leverage?
]]>By: crocodilechuckhttp://blogs.reuters.com/felix-salmon/2010/12/21/cuomo-lashes-out-at-ernst-young/comment-page-1/#comment-22141
Wed, 22 Dec 2010 02:11:21 +0000http://blogs.reuters.com/felix-salmon/?p=6677#comment-22141“Can we assume there were no former Arthur Anderson employees working at E&Y, or would that be pathetically naive?” In Austalia, E&Y hoovered up the Arthur Andersen audit business.

And, off topic, (but not really): Felix, thanks for your wit, balance and perspicacity in 2010. Your site: one of the best. Best wishes for the holidays!

]]>By: PR1http://blogs.reuters.com/felix-salmon/2010/12/21/cuomo-lashes-out-at-ernst-young/comment-page-1/#comment-22138
Wed, 22 Dec 2010 00:05:42 +0000http://blogs.reuters.com/felix-salmon/?p=6677#comment-22138Why do you use terms in your headlines such as “lashes out” in lieu of “criticizes” or “accuses”? It implies a degree of excessive emotion (even physicality) rather than legal justification.
]]>By: EricVincenthttp://blogs.reuters.com/felix-salmon/2010/12/21/cuomo-lashes-out-at-ernst-young/comment-page-1/#comment-22134
Tue, 21 Dec 2010 21:13:54 +0000http://blogs.reuters.com/felix-salmon/?p=6677#comment-22134Can we assume there were no former Arthur Anderson employees working at E&Y, or would that be pathetically naive?
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